Posted on: Wednesday, July 11, 2001
Trans Hawaiian files for bankruptcy
By Andrew Gomes
Advertiser Staff Writer
Owners of financially troubled Trans Hawaiian Services Inc. have shut the business down and plan to liquidate assets after an effort to save Hawaii's second-biggest tour and transportation company failed.
Trans Hawaiian and four affiliated companies doing business on O'ahu, Maui, Kaua'i and the Big Island filed for Chapter 11 bankruptcy Friday, listing combined assets of about $1 million and debts of about $7 million.
Chuck Choi, an attorney representing Trans Hawaiian, said the company has ceased virtually all operations and intends to sell its four island-specific operating licenses, which represent almost all of the value in Trans Hawaiian's assets.
Company representatives could not be reached yesterday for more information. Last year, Trans Hawaiian had about 330 employees and $13 million in revenues, according to filings with the state Public Utilities Commission.
Other carriers have assumed services dropped by Trans Hawaiian, including trolley rides, airport shuttles and tours, said Kevin Katsura, an attorney for the commission. "I don't think that there are any stranded passengers," he said.
Trans Hawaiian is a former unit of Honolulu-based International Management & Services Inc. founded by Raymond Miyashiro.
Last December, in the midst of Trans Hawaiian financial troubles, Miyashiro sold the company to a Nevada firm headed by Mark and Scott Iwamoto, sons of Robert Iwamoto Jr., chief executive of Trans Hawaiian competitor Roberts Tours & Transportation.
At the time of the sale, under a separate management contract, Roberts, the state's largest tour and transportation firm, arranged to provide some overhead and services for Trans Hawaiian, including bus-yard space, office space, insurance, billing and vehicle maintenance. It also mixed passenger loads on overlapping routes, but was to remain a competitor on the sales side with separate buses.
At the time, Robert Iwamoto said he expected the management contract to result in "significant" savings for both companies, including possible rent savings on Neighbor Island property alone totaling about $250,000 a year.
But increasing weakness in Mainland and Japanese visitor arrivals this year have reopened wounds of an industry hit hard by recent years of declining passenger levels, high operating costs and stagnant rates.
The last rate increase was almost 6 percent in January 1996. A request for a 12 percent increase is before the Public Utilities Commission, which regulates tour transportation prices and leaves competition to companies.
"This is a very tough year," said Michael Carr, president of tour and transportation firm Polynesian Adventure Tours. "Given the state of the visitor industry, there are way too many bus companies."
Trans Hawaiian's debts apparently reached unacceptable levels for creditors, several of whom began filing lawsuits against the company in recent months.
Trans Hawaiian's largest listed creditor is Aloha Airlines, which has a $2 million claim related to airline tickets Trans Hawaiian purchased for tour packages. Roberts is Trans Hawaiian's next largest creditor, with a claim of nearly $440,000.
Roberts spokeswoman Sam Shenkus said it will be business as usual for Roberts. "Nobody will miss a ride to a luau," she said.
The PUC is investigating Trans Hawaiian to determine whether the company's sale and management contract complied with commission rules.
Other major creditors include the Polynesian Cultural Center, Smith's Motor Boat Services, the state Tax Department and state Department of Transportation.
